August 5

8/5 – Last week, Rabobank released a report saying that China’s ASF-ravaged hog herd is down 40% from a year ago. Rabobank’s numbers are supported by a Reuters survey of suppliers to Chinese farms. Producers of vaccines, feed additives and genetics also estimated losses at 40-50%, based on falling sales for their products and local knowledge of the extent of the disease. If Rabobank is correct, the world will lose a quarter of its pork production, which equates to roughly 6-7% of all global meat and poultry supplies. Pork, beef and poultry producers globally will be scrambling to increase capacity to fill China’s needs. And, regardless of trade policy, by 2020 the U.S. will be one of the main exporters of breeding stock to support that global demand. Lean hog futures, which averaged 11% below a year ago in Q1, closed at $76.28 on Friday – 29% above year ago levels.